Two of the best buy and hold stocks right now

Buy and hold stocks are held for years, or for as long as strong financial health and strong earnings growth persist.

Cory Mitchell, CMT, an analyst with Trading.biz has compiled a list of the top buy and hold stocks right now, based on, strong historical track record of increasing profits, a history of outperforming the S&P 500 and analysts are predicting strong yearly earnings and revenue growth over the next five years.

Any single one of these criteria may not be all that important on its own. The combination of all of them is key, as it shows the company already has a long track record of producing escalating returns, which is expected to continue into the future.

ExlService Holdings (EXLS)

EXLS helps businesses transform and progress through data-driven analytics.

Over the last five years, it has increased its yearly earnings by an average of 29% per year. By comparison, the average company on the S&P 500 has only increased earnings by 6.7% per year over that time.

It has an “A” financial health rating from Morningstar and is expected to grow earnings by 15% per year over the next five years (again, well above the S&P 500 average of 8.5%).

The stock is 25% below its 2022 all-time high price and has a forward price/earnings (P/E) ratio of 18. This is in line with the S&P 500 average of 16. Yet given the much higher growth prospects of EXLS, an 18 forward P/E is actually a very attractive valuation for this stock.

The stock has increased an average of 18% per year over the last decade, versus 12% per year for the S&P 500.

Cencora (COR)

COR is a pharmaceutical wholesaler, distributing both branded and generic drugs to hospitals, healthcare providers, and pharmacies around the United States.

Over the last five years, it increased yearly earnings by an average of 11% per year.

It has a “B” financial health rating from Morningstar and is expected to grow earnings by 8.7% per year over the next five years.

The stock is 9% below its 2023 all-time high and has a forward P/E ratio of 14. That’s lower than the S&P 500 average, and the stock has slightly more expected yearly growth than an average S&P 500 stock. That makes COR a good value.

Stock price declines of 10% to 15% have been excellent buying opportunities over the last five years.

The stock has increased an average of 13% per year over the last decade.

Long-term Investing Performance

The chart below shows how EXLS and COR have performed relative to the SPDR S&P 500 ETF Trust (SPY) over the last five years.